Are Appraisals Finally Playing Catch-Up?

Many Dallas Real Estate professionals have been blaming low appraisals for derailing transactions over the last few years. But now home prices are heating up across the country. Are appraisals still coming in lower than the agreed-upon sales price? 

Even…

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Are Appraisals Finally Playing Catch-Up?

Many Dallas Real Estate professionals have been blaming low appraisals for derailing transactions over the last few years. But now home prices are heating up across the country. Are appraisals still coming in lower than the agreed-upon sales price? 

Even with prices rising and the number of foreclosures falling, some appraisers say assigning a value to a property isn’t getting any easier. One of the big reasons, they say, is because of low inventories in many markets. “An undersupply of available homes has prompted bidding wars above list price, a price that isn’t necessarily justified by an appraisal,” The Chicago Tribune reports. 

“That’s been happening a lot this winter and spring — the appraisal isn’t coming in,” Alvin “Chip” Wagner, of A.L. Wagner Appraisal Group Inc. told The Chicago Tribune. “It’s an appreciating market, and the closed data that appraisers use is behind what the homes are actually selling for right now. We’re just now on the cusp of good data.”

Dallas Appraisers say they are using sound data to base their valuations, including motivations of buyers and sellers. 

Consumers “don’t always value us in a friendly light because we are the person coming in and saying yea or nay, and we’ve been the bearer of bad news for too many years,” says Sharon Bagby, an appraiser at Crystal Lake Appraisal Service Inc. “Home owners don’t really know where the values are. They’re hearing some really rosy values in some markets, but we have to work with the value that’s there.”

Dallas Real Estate

Americans think the housing market has rebounded.

More than half of Americans now expect the country’s home prices to climb within the next year, illustrating a growing optimism toward the health of the housing industry, according to Fannie Mae’s April 2013 National Housing Survey.

The share of people who say home prices will go up in the next 12 months hit a survey high of 51%, while those who believe home prices will go down remained at the survey low of 10% for the fourth month in a row. 
By comparison, at the same time last year only 32% expected an increase in home prices.

“Crossing the 50% threshold marks a significant milestone as most Americans believe a housing recovery is truly occurring throughout the country,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Reflecting that increased optimism toward housing, the share of Americans who think it is a good time to sell has doubled during the last year. Many homeowners who have been underwater are gradually returning to positive equity, and selling is now becoming an available and attractive option again.”

The share of respondents who say now is a good time to sell climbed 4 percentage points in April to 30%, compared to 15% at the same time last year.

Americans’ increasing optimism toward the selling market may bode well for continued improvement in housing activity, as recent market data suggest that five out of eight people who buy a home first have to sell, Fannie Mae reports.

The survey also found:

  • The average 12-month home price change expectation held steady at 2.7%.
  • The share of respondents who say mortgage rates will go up fell 3 percentage points to 43%, while those who say they will go down increased slightly to 7%.
  • The share of respondents who said they would buy if they were going to move increased slightly to 65%.

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